IndexBox has just published a new report: ‘World – Sugar – Market Analysis, Forecast, Size, Trends and Insights’. Here is a summary of the report’s key findings.

This year, world sugar production is expected to rise by 3% to 193M tonnes. The growth will be encouraged by favorable weather conditions in most of the largest producing countries, as well as the providing exemptions on the neonicotinoid usage against plant diseases and blights in France, Germany and the UK. The drop in sugar production and shipments from Brazil will be offset by large volumes coming from Thailand, which will boost global exports by +2.6% y-o-y. The increased supply in the world market is to keep sugar prices relatively stable over the next two years.

Key Trends and Insights

According to IndexBox estimates based on USDA data, global sugar production will increase by +3% y-o-y to 193M tonnes in 2021, driven by high demand from China and India. The economy’s gradual recovery after the pandemic and the relative normalization of the catering and food service sector are contributing to the growth of worldwide demand.

Sugar production in the U.S. will remain at its 2020 rate to the end of this year and will amount to 8.7M tonnes. Strong growth in America’s sugar beet crop should offset the expected decline in sugar cane production in Louisiana.

Due to a prolonged drought, the sugarcane crop in Mexico may decline slightly to 7.5M tonnes, while in Australia favorable weather conditions will boost production by +1.5% y-o-y to 4.6M tonnes.

Production in Brazil will fall by -5% y-o-y to 26M tonnes due to dry weather and wildfires, as well as the decrease in sugar cane planted in favor of soybeans and corn.

An increase in harvest compared to last year is expected in Guatemala (by +3% to 3.1M tonnes), India (by +3% to 36M tonnes), Indonesia (by +3% to 2.3M tonnes), Pakistan (by +14%to 6.6M tonnes), Thailand (by +39% to 25M tonnes), and Russia (by +6% to 7.5M tonnes).

In the EU, sugar production is forecasted to increase by +7% to 19M tonnes this year. This will most likely be facilitated by the removal of bans on the use of neonicotinoids in France and Germany. Sugar beet seeds will be allowed to be coated with the substance to protect against the yellow beet virus, which would ensure high yields. In the UK, the approval to use neonicotinoids should increase yields by +11% to 1.2M tonnes.

Global sugar exports will increase by +2.6% to 39M tonnes. A decrease in exports from Brazil will be offset by growth in supplies from Thailand. Russian sugar exports are expected to decline by approx. 390K tonnes due to decreases in shipments to Kazakhstan and Uzbekistan amid falling demand for imported sugar in these countries.

According to USDA forecasts, global sugar prices in the current year and the first half of 2022 will remain stable at $0.44 per kg. This will be due to an increase in the sugar supply on the world market, despite the decline in production in some above-mentioned countries.

Global Sugar Exports by Country

In 2020, global exports of sugar skyrocketed to 35M tonnes, increasing by +23% compared with 2019 figures. In value terms, sugar exports rose remarkably to $10.4B in 2020.

Brazil prevails in sugar export structure, amounting to 27M tonnes, which was approx. 75% of total exports in 2020. Thailand (3M tonnes) held the second position in the ranking, followed by India (1.7M tonnes). All these countries together took near 13% share of total exports. The following exporters – Guatemala (824K tonnes), South Africa (671K tonnes) and El Salvador (532K tonnes) – each finished at a 5.7% share of total exports.

Brazil was also the fastest-growing country in terms of sugar exports (+66.9% y-o-y) in 2020. At the same time, India (+21.3%) and El Salvador (+3.5%) also displayed positive paces of growth. By contrast, Guatemala (-19.6%), Thailand (-20.9%) and South Africa (-31.0%) illustrated a downward trend over the same period.

In value terms, Brazil ($7.4B) remains the largest sugar supplier worldwide, comprising 71% of global exports. The second position in the ranking was occupied by Thailand ($885M), with an 8.5% share of global exports. It was followed by India, with a 5.4% share.

Largest Sugar Importers Worldwide

Indonesia (5.3M tonnes) and China (4.7M tonnes) represented roughly 42% of total imports of sugar in 2020. The U.S. (2.3M tonnes) took a 9.9% share (based on tonnes) of total imports, which put it in second place, followed by Malaysia (8.8%), India (8.5%) and South Korea (7.8%). Japan (1,049K tonnes), the UK (528K tonnes), South Africa (385K tonnes) and Taiwan (Chinese) (384K tonnes) held a little share of total imports.

In value terms, the largest sugar importing markets worldwide were Indonesia ($1.8B), China ($1.5B) and the U.S. ($1.3B), with a combined 49% share of global imports. These countries were followed by Malaysia, India, South Korea, Japan, South Africa, the UK and Taiwan (Chinese), which together accounted for a further 31%.

Source: IndexBox Platform